What Is Database Marketing?

Database marketing brings a data-centric approach to marketing strategy with the intention of personalizing experiences through trends found in data.

Written by Matthew Urwin
Published on Dec. 15, 2021
What Is Database Marketing?
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Taryn Mohnsen | Aug 11, 2022

To learn more about their customers’ current and potential needs, marketers collect names, contact or location information, purchase history, and other information useful for influencing the creation of campaigns and products. Teams organize and leverage this data to produce highly-tailored activations that are relevant to specific groups of customers.

What are the benefits of database marketing?

  • Database marketing enables businesses to tailor their communication to customers, allowing them to stand out from the crowd.

People encounter dozens of advertisements on a daily basis. Database marketing provides proven information that helps companies distinguish themselves from the noise and reach consumers at a subconscious level. With insight into past and targeted customer demographics and behavior, retail brands and other companies across industries can adjust their content and offerings to better serve the needs of specific consumers. 

Creating timely and useful experiences keeps people loyal to a business, which is one of the many benefits of database marketing. However, a customer base is a diverse group rather than a monolith. Database marketing encourages teams to determine new ways of engaging potential buyers and long-time customers. With this distinction in mind, companies can narrow down their marketing further to develop specific perks like first-time discounts and loyalty programs, as well as specific tactics that may only appeal to niche audiences.

What are examples of database marketing?

  • Organizations need to get creative when seeking personal information, so methods like product giveaways and free trials serve as convenient strategies.

Companies can reach out to consumers through surveys, coupons and giveaways to boost brand awareness and customer loyalty while also gathering high-quality data. However, they can also obtain useful information during transactions and when customers visit their sites. Database marketing also involves tracking consumer behavior throughout the customer journey, gathering data on the best ways to convert site visitors into customers. Retaining customers is just as important as acquiring them, so companies should view repeat purchasing factors as prominent data.  

By earning data on an individual’s background and past transactions, companies can craft content and experiences that best suits that person’s needs. Teams can send personalized emails, discounts on items of interest, and social media posts at certain times of the year. By gathering consumer info and reshaping a marketing strategy around it, businesses can make customers feel valued and win them over for the long haul. 

What are challenges in using database marketing?

  • Not only must businesses figure out ways to collect data from people, but they must have the capacity to organize this information.

There are a few things marketing teams need to consider when collecting personal information. While gathering large amounts of data isn’t always a bad thing, it can become a problem if teams don’t know how to organize this information. Relying on consumer data platforms, proper data structuring, experienced data analysts, and utilizing additional tools can resolve this issue.  

However, sorting data is only the beginning. Because personal information and demographics may change, cleaning up data becomes a crucial task in the current digital climate. Sending ads to old emails and reaching out to customers no longer interested in a company both waste time and energy while also negatively impacting forecasting. By keeping a database current, marketers can remain efficient and focused on the clients who are most invested in their business.

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